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Debts | 12 Months Ended
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Jun. 30, 2016
Debt Disclosure [Abstract] |
Debts | NOTE 12 – DEBTS Notes and leases payable consisted of the following:
|  |  |  | As of June 30, 2016 |
|  |  |  |  |  |  | Current |  |  | Long-Term |
Name |  |  |  | Total |  |  | Maturities |  |  | Maturities |
D&O Insurance |  | (1) |  | $ | 65,114 |  |  | $ | 65,114 |  |  | $ | - |
HSBC Loan |  | (2) |  |  | 93,704 |  |  |  | 93,704 |  |  |  | - |
Loan Payable Bank |  | (3) |  |  | 3,792,907 |  |  |  | 3,792,907 |  |  |  | - |
Loan From Related Party |  | (4) |  |  | - |  |  |  | - |  |  |  | - |
|  |  |  |  | 3,951,725 |  |  |  | 3,951,725 |  |  |  | - |
Subsidiary Capital Leases |  | (5) |  |  | 966,051 |  |  |  | 488,359 |  |  |  | 477,692 |
|  |  |  | $ | 4,917,776 |  |  | $ | 4,440,084 |  |  | $ | 477,692 |
|  |  |  |  | As of June 30, 2015 |
|  |  |  |  |  |  |  |  | Current |  |  |  | Long-Term |
Name |  |  |  |  | Total |  |  |  | Maturities |  |  |  | Maturities |
D&O Insurance |  | (1) |  | $ | 79,872 |  |  | $ | 79,872 |  |  | $ | - |
HSBC Loan |  | (2) |  |  | 447,161 |  |  |  | 322,349 |  |  |  | 124,812 |
Loan Payable Bank |  | (3) |  |  | 2,892,961 |  |  |  | 2,892,961 |  |  |  | - |
Loan From Related Party |  | (4) |  |  | 129,979 |  |  |  | 129,979 |  |  |  | - |
|  |  |  |  | 3,549,973 |  |  |  | 3,425,161 |  |  |  | 124,812 |
Subsidiary Capital Leases |  | (5) |  |  | 833,872 |  |  |  | 471,192 |  |  |  | 362,680 |
|  |  |  | $ | 4,383,845 |  |  | $ | 3,896,353 |  |  | $ | 487,492 |
(1) The Company finances Directors’ and Officers’ (“D&O”) liability insurance as well as Errors and Omissions (“E&O”) liability insurance, for which the total balances are renewed on an annual basis and as such are recorded in current maturities. The interest rate on the insurance financing was 0.49% as of June 30, 2016 and 2015, respectively. (2) In October 2011, the Company’s subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of 51% of a controlling interest in Virtual Leasing Services Limited. HSBC Bank guaranteed the loan up to a limit of £1,000,000, or approximately $1,333,333 for a period of 5 years with monthly payments of £18,420, or approximately $24,560. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the years ended June 30, 2016 and 2015 was $12,846 and $47,255, respectively. This facility requires that NTE’s adjusted tangible net worth would not be less than £600,000. For this purpose, adjusted tangible net worth means shareholders’ funds less intangible assets plus non-redeemable preference shares. In addition, NTE’s cash debt service coverage would not fall below 150% of the aggregate debt service cost. As of June 30, 2016, NTE was in compliance with this covenant. (3) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 400,000,000 or $3,792,907. The interest rate for the loans was 4.5% and 7.5% at June 30, 2016 and 2015, respectively. Interest expense for the year ended June 30, 2016 and 2015 was $148,475 and $146,264, respectively. This facility requires NetSol PK to maintain a long term debt equity ratio of 60:40 and the current ratio of 1:1. As of June 30, 2016, NetSol PK was in compliance with this covenant. (4) In March 2014, the Company’s subsidiary, VLS, entered into a loan agreement with Investec. The loan amount was £150,000, or approximately $200,000, for a period of two years with annual payments of £75,000, or approximately $100,000. The interest rate was 3.13%. As of June 30, 2016, VLS has paid this facility in full. All future payments of the loans described in the above sub notes 1 to 4 are considered current maturities. (5) The Company leases various fixed assets under capital lease arrangements expiring in various years through 2018. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are depreciated over the lesser of their related lease terms or their estimated useful lives and are secured by the assets themselves. Depreciation of assets under capital leases is included in depreciation expense for the years ended June 30, 2016 and 2015. Following is the aggregate minimum future lease payments under capital leases for the year ended June 30, 2016:
|  | Amount |
Minimum Lease Payments |  |  |  |
Due FYE 6/30/17 |  | $ | 548,023 |
Due FYE 6/30/18 |  |  | 316,115 |
Due FYE 6/30/19 |  |  | 195,956 |
Total Minimum Lease Payments |  |  | 1,060,094 |
Interest Expense relating to future periods |  |  | (94,043 | )
Present Value of minimum lease payments |  |  | 966,051 |
Less: Current portion |  |  | (488,359 | )
Non-Current portion |  | $ | 477,692 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References No definition available. + Details
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